The first time you buy a home is a huge step regardless of the stage of life. It can be an exciting and scary experience at the same time. It is important to do and look for the right things when buying a home, to ensure everything goes smooth and that you get the most out of it! Here are 10 tips for first time home buyers:
- Start saving as soon as possible
Owning a home is expensive, more expensive than renting. While the monthly payments can be lower, having to hand all upkeep and maintenance of the house adds up fast. This is why it is important to go into owning a home debt-free and with a large savings. The debt will make it harder to afford the home you want, and having savings gives you something to fall back on if something were to go wrong. You also want to save as much as possible for the down payment. The higher down payment you can put down in the beginning, the less financial strain the house will be on you in the long run. You will be paying less on the mortgage a month and the interest rate will not affect the final cost as much.
2. Identify your needs
It is important to know what you need from a home. Do you need 4 bedrooms and 2 bathrooms? Do you want a two story? Maybe one with a basement? These are all things you need to consider before you even start looking at the market. Ideally you should be looking at the future. If you want kids but do not have any at the moment, take that into account when deciding how many bedrooms you need. Keep location in mind as well. Make a list of all the things you need out of a house and keep it on you when house hunting.
3. Know your mortgage options
There is a multitude of different mortgage loan options. It is important to know what all your options are, as some will benefit you much more than others. Some of the differences in these loans include a fixed rate vs. adjustable rate as well as FHA and VA loans. You often also have options on the term. For example, a 30-year term where the monthly payments are lower, but the interest rate is higher vs. a 15-year term where the monthly payments are higher, but the interest rate is lower.
4. Take your time
Rushing the process is one of the worst things you can do. You will most likely end up with a house that you did not fully think through. It’s a good thing to take your time, to make sure you understand everything that is being presented to you. This also applies to when you are looking and mortgage loan options.
5. Choose a good real estate agent
A good real estate agent can make worlds of difference when searching for a home. They can look for the best deals in the best neighborhoods, all according to what you are looking for. They can also help you with the actual buying of the home, something they are much more experienced with.
Once you begin the closing process on a house, get it inspected. You typically have a little over a month to have something like this done. Getting a professional inspection done on your future home can save a lot of future headaches, as they are meant to find anything wrong with the house before you move in. Depending on the type of inspection, you may need more than one done as not everyone inspects for the same things, such as mold or infestations.
A seller asking price is almost never set-in stone. One of the best things you can do is attempt to negotiate. Sometimes the seller will be willing to work on a new price with you, something your real estate agent can help with as well. This does not guarantee you can get a cheaper price, sometimes sellers are adamant about what they want for the house and are not willing to budge. This is also a time to talk about getting the seller to cover any closing costs.
8. Open houses are your friend
While you should always go with the house you like best that is within your price range, it never hurts to go to open houses. Open houses allow you to experience houses you may have never looked at, possibly finding one that you want in the end. They also help you learn about the area better than if you were just looking online.
9. Home insurance
Home insurance is not something you want to skimp on. Home insurance is the one thing protecting you from having to spend thousands upon thousands of dollars on your home or belongings in the case of the home being destroyed via natural disasters, fire, burglary, etc. This will often be done during the closing process.
10. Stick to your budget
When looking at houses and loans, you may be pushed to spend or take out a loan for more than you can truly afford. Do not fall for this. It will hurt you in the long run. Set your budget from the very beginning and stick to it throughout the whole process. Not sticking to your budget can cause major issues down the road.
Buying a home is big, and you want to make sure you do it right, so you set yourself up for success and not for big, unwelcome mistakes. Following these tips will guide you in the right direction!